SEC Adopts Rule Implementing Dodd-Frank Act Requirements For Compensation Committees

On June 20, 2012, the Securities and Exchange Commission (SEC) adopted a rule regarding the new listing standards for compensation committees required by the Dodd- Frank Act of 2010. Final action to implement the listing standards will need to be taken by the applicable securities exchanges including the NYSE and NASDAQ. New SEC Rule 10C-1 establishes the parameters for the final action by the exchanges, giving the exchanges discretion as to some of the new compensation committee requirements subject to final SEC review and approval of each exchange's final standards. The exchanges will have 90 days from the publication of the Rule 10C-1 to propose amended listing standards that comply with the rule and one year to adopt final amended listing standards. The SEC also adopted an amendment to Item 407 of Regulation S-K expanding the disclosure requirements in proxy statements regarding compensation committees.